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Following is the Balance Sheets of Wind Power Ltd as at 31.3.2014: During the Year a Piece of Machinery, Costing Rs 96,000 on Which Accumulated Depreciation Was Rs 64,000 Was Sold for Rs 24,000. Prepare Cash Flow Statement - CBSE (Arts) Class 12 - Accountancy

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Question

Following is the Balance Sheets of Wind Power Ltd as at 31.3.2014:

Wind Power Ltd
Balance Sheet as at 31.3.2014
Particulars Note
No

2013-14

Rs

2012-13

Rs

I. Equity and Liabilities

   1. Shareholder’s Funds

      a. Share Capital 

      b. Reserve and Surplus

  2. Non - Current Liabilities

     a. Long-term borrowings

  3. Current Liabilities

    a. Trade Payables

    b. Short-Term Provisions

 

 

 

1

 

 

 

 

 

 

 

48,00,000

12,00,000

 

9,60,000

 

7,16,000

2,00,000

 

 

44,00,000

8,00,000

 

6,80,000

 

8,16,000

3,08,000

Total   78,76,000 70,04,000

II. Assets
1. Non – Current Assets

  a) Fixed Assets

    (i) Tangible assets

    (ii) Intangible

  b) Non – Current Investments

2. Current Assets

   a) Current Investments

   b) Inventories

   c) Trade Receivables

   d)Cash and Cash Equivalents

 

 

2

3

 

 

 

 

 

 

 

 

42,80,000

1,60,000

 

 

9,60,000

5,16,000

6,80,000

12,80,000

 

 

34,00,000

4,80,000

 

 

4,48,000

4,84,000

5,72,000

16,20,000

Total   78,76,000 70,04,000

Notes to Accounts

Note
No
Particulars As On
31-3-2014
As On
31-3-2013
1

Reserve and Surplus
(Surplus i.e. Balance in Statement of Profit and Loss)

12,00,000

8,00,000

2

 

 

Tangible Assets

Machinery

     Less: Accumulated Depreciation

 

50,80,000

(8,00,000)

 

40,00,000

(6,00,000)

3

 

Intangible Assets

Goodwill

 

1,60,000

 

4,80,000

Additional information

During the year a piece of machinery, costing Rs 96,000 on which accumulated depreciation was Rs 64,000 was sold for Rs 24,000.

Prepare Cash Flow Statement

Solution

Cash Flow Statement
for the year ended March 31, 2014
  Particulars Rs Rs

A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flow from Operating Activities

Profit as per Statement of Profit and Loss

            Profit Before Taxation

Items to be added

Amortisation of Goodwill

Depreciation

Loss on Sale of Fixed Assets

          Operating Profit before Working Capital Adjustments

Less: Increase in Current Assets

  Inventories

  Trade Receivables

Less: Decrease in Current Liabilities

   Trade Payables

   Short – Term Provisions

       Net Cash Generated from Operating Activities

 

4,00,000

 

 

3,20,000

2,64,000

8,000

 

(32,000)

(1,08,000)

 

 

(1,00,000)

(1,08,000)

 

 

 

4,00,000

 

 

 

5,92,000

9,92,000

 

 

 

 

 

 

6,44,000

B

 

 

 

Cash Flow from Investing Activities

    Sale of Machinery

    Purchase of Machinery

       Net Cash Used in Investing Activities

24,000

(11,76,000)

 

 

 

(11,52,000)

C

 

 

 

Cash Flow from Financing Activities

  Proceeds from Issue of Share Capital

  Proceeds from Long-Term Borrowings

     Net Cash Flow from Financing Activities

 

4,00,000

2,80,000

 

 

 

 

6,80,000

D

 

 

Net Increase or Decrease in Cash and Cash Equivalents

   Add: Cash and Cash Equivalents in the beginning of the period

Cash and Cash Equivalents at the end of the period

 

1,72,000

20,68,000

22,40,000

 

Machinery Account
Dr   Cr.
Particulars Rs Particulars Rs
To Balance b/d 40,00,000 By Bank A/c (Sale) 24,000
To Bank A/c 11,76,000 By Depreciation on Part of Machinery A/c 64,000
    By Profit and Loss A/c (Loss on Sale) 8,000
    By Balance c/d 50,80,000
  51,76,000   51,76,000

 

Accumulated Depreciation Account
Dr.   Cr.
Particulars Rs Particulars Rs
To Machinery A/c 64,000 By Balance b/d 6,00,000
To Balance c/d 8,00,000 By Profit and Loss A/c
(Dep. Charged during
the year – Bal. Fig)
2,64,000
  8,64,000   8,64,000
  Is there an error in this question or solution?

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Solution Following is the Balance Sheets of Wind Power Ltd as at 31.3.2014: During the Year a Piece of Machinery, Costing Rs 96,000 on Which Accumulated Depreciation Was Rs 64,000 Was Sold for Rs 24,000. Prepare Cash Flow Statement Concept: Concept of Cash Flow Statement.
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